Renewable energy generation and the need to store it

The interplay between energy storage technology and renewable energy generation is particularly relevant in Africa as it holds the potential to unlock economic growth powered by cost-effective, sustainable and clean energy.

Insecure, intermittent and expensive power supply is one of the greatest threats to sustaining high economic growth in Africa. Sub-Saharan Africa has an electrification level below 30% as a result of weak, damaged or underdeveloped power infrastructure. Despite this challenge, demand for improvement of power provision remains high.

Fortunately, Africa plays host to many of the most irradiated places on earth giving it tremendous solar energy capabilities, potential hydroelectric power is ten times Russia’s total renewable energy production and wind and geothermal energy resources are abundant. The large supply and rising demand for renewable power and the falling costs of renewable technology underlie the recent increase in global investment in renewable energy. The South African Department of Energy has approved 5,243MW of renewable energy (securing ZAR168bn in private investment) over the past four years.

Energy storage technology is widely recognised as the “holy grail” in the quest to unlock the potential of renewable energy. The Achilles heel of renewable energy is its variability of supply (power flows when the sun shines or the wind blows). This variability makes it near impossible for grid operators to accurately match demand and supply – particularly for solar energy where peak-production (around midday) coincides with demand troughs. Cost-effective energy storage would solve this problem by allowing renewable producers to achieve maximum power generation without suffering demand-cycle losses.

Technology

Energy storage technology takes several forms which differ in cost and attributes. African energy storage initiatives (mostly in South Africa) vary between pumped storage of hydro power and solar storage either in batteries or molten salt (in ‘concentrated solar power’ plants). Last year saw the continuation of this trend, with the completion of the 100-megawatt KaXu CSP plant in South Africa and the 160-megawatt Noor-I CSP plant in Morocco which provide 2.5 and 3 hours of thermal storage respectively. The 1 332-megawatt Ingula pumped hydro plant currently under construction in South Africa is scheduled to begin operation in late 2016 and will significantly boost energy storage capabilities there.

US electric car giant Tesla recently unveiled a selection of affordable batteries for home and industrial use, which if coupled with renewable energy, may allow for the electrification of remote rural areas on ‘mini-grids’ or the production of ‘peaking’ power plants to ease demand-cycle pressures on overburdened infrastructure.

Regulation

Given its early-stage of development (and the entrenched monopolies of most government owned national power utilities), regulatory issues may prove the greatest threat to the widespread uptake of energy storage technology, particularly in the ‘mini-grid’ and home-use formats. In particular, municipal power providers have offered serious resistance when faced with rooftop solar coupled with battery storage, on the grounds that such developments threaten one of their key sources of revenue – selling electricity.

The future

The rapidly declining cost of renewable energy and energy storage technology, coupled with Africa’s high potential for renewable storage and largely undeveloped power infrastructure provides a fertile ground for what some perceive will be the renewable-energy/energy-storage revolution. African power regulators, DFI’s and commercial banks have already illustrated both significant willingness to embrace this exciting new technology and an appetite for the risks involved in investing in it. Given the current trends, this space will likely show significant growth and investment in the next few years.

The Inside Africa Team would like to thank Jonathan Hock, Trainee Solicitor, for his contribution to this blog post.

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Africa is as dynamic a market as it is diverse. We understand that changes impacting your business can arise rapidly and vary significantly across the continent.

Our understanding of Africa’s markets stems from extensive experience on the ground. Through our Inside Africa blog, we aim to apply this insight to provide you with timely commentary on the latest developments across Africa, as well as insight into the many nations that make up this vast continent.